But the country's government must overcome internal disputes over oil rights with the autonomous Kurdish region in the north and increase current investment from $9bn (£5.6bn) in 2011 to $25bn a year on average for the rest of the decade, the authors warned.

The IEA's chief economist, Fatih Birol, explained: "Developments in Iraq's energy sector are critical for the country's prospects and also for the health of the global economy.

"But success is not assured, and failure to achieve the anticipated increase in Iraq's oil supply would put global oil markets on course for troubled waters."

Executive director, Maria van der Hoeven, added: "We all have an interest in Iraq realising its potential and revitalising its economy."

Decades of conflict have left Iraq's oil and energy sector in disarray, but Baghdad has recently signed a series of contracts with BP and Royal Dutch Shell, among others, to raise production levels.

This year output passed 3m barrels per day (bpd) for the first time in 30 years and the country, which has the world's fourth-largest oil reserves, overtook Iran to become the second biggest producer in the Opec cartel.

The report said Iraq can hit 6.1m bpd by 2020 and 8.3m bpd in 2035 mainly in and around Basra in the south.

However, an ongoing dispute with the Kurdistan regional government could slow progress. The federal government says deals which the Kurds have signed with ExxonMobil and Chevron are illegal.

A new law on hydrocarbons and revenue sharing is currently being debated but failure would cause delays.

The report said: "Iraq stands to gain almost $5tn (£3tn) in revenues from oil export over the period to 2035, an annual average of $200bn and an opportunity to transform the country's future prospects. Achieving the required level of oil production and export will require rapid, co-ordinated progress all along the energy supply chain."

One beneficiary of the surge in oil flows from Iraq, the IEA said, will be China. The agency forecast that by 2020, 80% of Iraq's oil will go to Asia.

The report also focused on Iraq's internal energy needs and revealed that it needs 70% more power generation capacity to meet current demands and avoid rolling blackouts which continue to affect the country.

If planned new capacity is delivered on time, however, the electricity grid will meet supply demands by 2015.

The report added: "Iraq needs to install around 70 gigawatts of generation capacity and move away from a predominantly oil-fired power mix to more reliance on efficient gas fired generation: without this transition Iraq would forego around $520bn in oil export revenues."